Greg Gibbs, analyst at Amplifying Global FX Capital, suggests that there are reasons to be restrained in setting EUR shorts.
“Brexit may be moving towards a less disruptive outcome, Chinese policy stimulus may precede improved Chinese, global and European economic data.”
“The US may soon reverse some or most of its tariffs on Chinese goods, and trigger a rebound in confidence for European assets. However, if the EUR has moved into a weaker regime over the last year; one where there is no overhang of Euro crisis era EUR hedges, and EUR is viewed as one of the best currencies for funding ‘risk-on’ or ‘carry trades’, then its upside may be limited, and it could retain a broader downtrend for the foreseeable future.”
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